Estimated tax Payments 1040-ES

Due to extreme unforeseen circumstances, lay off, withdrawal of 401K, I had to pay taxes this year in excess of $999.00 due to this I have been told that I should make quarterly estimated tax payments. This information came from Turbo Tax software.


As it stands for my 2002 filing year I will be receiving a refund, me owing taxes was a one time thing. If I will be getting a refund in 2002, and I am making adjustments with my employer to insure this, do I need to make the 1040-ES payments to the IRS?

Any help is appreciated.

Christine

No, you do not have to make the estimate payments if you work it out so that you owe no tax at the end of the year. However, in this situation, if you make a mistake and end up owing tax, there could be a penalty for underestimation of tax. The penalty would be a percentage of the amount you owed.

Tip: if you find in December that you will be owing tax, have your company withhold enough in December to make up for that.